Last reviewed: 10 September 2026. A steady stream of reassessment notices issued under Section 148 and Section 148A continues to be challenged, and set aside, on the ground that the Assessing Officer is doing nothing more than taking a second, different view of facts and material that were already on record during the original assessment. This “change of opinion” bar, rooted in the Supreme Court’s settled ruling in Kelvinator of India and consistently applied since, remains one of the sharpest and most cost-effective defences available to a taxpayer — provided it is raised at the right stage, ideally in the reply to the Section 148A(b) show-cause notice itself, before a formal reassessment order is even passed.
The change-of-opinion bar: what it actually means
Reopening an assessment requires the AO to have “reason to believe” (or, under the current Section 148A regime, “information suggesting”) that income has escaped assessment. Where the material forming the basis of that belief was already before the AO during the original assessment — on the face of the return, in the tax audit report, or specifically called for and examined during scrutiny — and the AO simply reads that same material differently later, courts treat this as a change of opinion, not a valid ground for reassessment. This principle traces back to the Supreme Court’s ruling in Kelvinator of India, and it continues to be relied upon in reassessment orders through 2025-26.
Revenue's view vs the taxpayer's view
The revenue’s working position is that reassessment is a legitimate safeguard against under-assessment, and that an AO can validly reopen a case even where the material was technically available in the file, if the original assessment order did not specifically discuss that issue — the argument being that “reason to believe” does not require the earlier AO to have applied their mind to every entry. An audit objection is also frequently cited by the department as the trigger for reopening, even where the objection is really just a difference in legal interpretation of facts already on record.
The taxpayer’s counter-position, and the one that has repeatedly succeeded, is that the test is whether the material was already before the AO or could have been called for during the original assessment — if so, a later change of mind, even one prompted by an audit objection that adds no new fact, remains a change of opinion rather than fresh information. Courts have drawn a clear line between an audit objection that points to a genuinely fresh fact or entry the AO never examined (which can validly trigger reassessment) and one that only disagrees with the AO’s prior legal view of facts already examined (which cannot).
Change of opinion vs a valid reassessment trigger
| Fact pattern | Typically treated as |
|---|---|
| AO revisits a deduction specifically queried and allowed in the original scrutiny, with no new material | Change of opinion — notice liable to be set aside |
| Claim not separately questioned in the original assessment but fully visible on the face of the return/audit report, with nothing new surfacing later | Generally treated as change of opinion where no new trigger exists |
| Audit objection pointing to a fact or entry the AO never examined at all | Can validly trigger reassessment (fresh material) |
| Audit objection that only disagrees with the AO’s legal view of facts already examined | Change of opinion — the objection alone is not fresh material |
| New AIS/SFT entry, investigation wing report, or third-party information surfacing after the original assessment | Valid ground for reassessment |
A worked example
Suppose an assessee claimed a business deduction of Rs 40,00,000 in its return, and during the original Section 143(3) scrutiny the AO specifically raised a written query on this exact claim; the assessee replied with supporting documents, and the AO allowed the claim in the final assessment order without any addition. Two years later, a fresh Section 148 notice is issued, with the recorded reasons stating that, on reviewing the file, the AO now believes the deduction was wrongly allowed — but the reasons do not refer to any new fact, any audit para pointing to unexamined material, or any third-party information; they simply reassess the same claim on the same documents already on file.
This is a textbook change-of-opinion case, and on these facts the notice would be vulnerable to being set aside if challenged. Contrast this with a variant where the reopening reasons instead cite a fresh AIS entry showing an unrelated Rs 15,00,000 receipt that was never disclosed in the return and never examined in the original assessment — that portion of the reopening stands on an entirely different footing, since it involves genuinely new information the AO could not have considered earlier.
Common mistakes when responding
- Filing a generic reply to the Section 148A(b) show-cause notice without specifically cross-referencing the original assessment record
- Not annexing the original assessment order, the scrutiny notices, and the assessee’s original replies as evidence that the issue was already examined
- Waiting until the appeal stage, after a full reassessment order is passed, to raise the change-of-opinion objection — when it could have been raised, and could have ended the matter, at the 148A(b) reply stage itself
- Assuming every audit objection automatically qualifies as “fresh material” without checking whether it actually points to new facts or is just a differing legal view
- Failing to distinguish a claim that was truly never examined (potentially reopenable, subject to other conditions) from one that was specifically queried and allowed (protected by change of opinion)
What should you do
- On receiving a Section 148A(b) show-cause notice, immediately retrieve the original assessment record — the scrutiny notices issued, your replies, and the final assessment order
- Prepare a point-by-point mapping: for each “reason to believe” or “information” cited by the AO, show whether it was already before the AO (queried and answered, or visible on the face of the return/audit report) or is genuinely new
- If no new material is identifiable, raise the change-of-opinion objection explicitly and specifically in the 148A(b) reply, supported by that mapping, requesting that proceedings be dropped at that stage
- If the AO proceeds to issue a Section 148 notice regardless, preserve the objection for appeal and argue it as a jurisdictional issue going to the validity of reopening, not only on the merits of the claim itself
- For any claim that was genuinely never scrutinised earlier, prepare a parallel, merits-based line of defence, since the change-of-opinion argument will not assist an issue that truly was never examined
Frequently asked questions
What is 'change of opinion' in the context of income tax reassessment?
It refers to an Assessing Officer reopening a completed assessment simply because they now take a different view of the same facts and material that were already before them, or could have been called for, during the original assessment — without any new information. This is barred and is not valid ground for reassessment.
Which case established this principle?
The principle traces back to the Supreme Court's ruling in Kelvinator of India, and it has been consistently applied and relied upon in reassessment litigation since, including in orders through 2025-26.
Can an audit objection justify reopening my assessment?
Only if the audit objection points to genuinely new information or a fact the AO never examined. An audit objection that merely disagrees with the AO's original legal interpretation of facts already on record is treated as a change of opinion, not fresh material.
When should I raise the change-of-opinion objection?
As early as possible — ideally in your reply to the Section 148A(b) show-cause notice, before a formal reassessment even begins. Raising it only at the appeal stage, after a reassessment order is passed, is far more expensive and time-consuming.
What counts as 'fresh, tangible material' that can validly justify reopening?
Examples include a new AIS or SFT entry not previously disclosed or examined, a fresh investigation or survey report, or new third-party information that surfaced after the original assessment — not a re-appraisal of material already considered.
What if my claim was never actually questioned in the original assessment?
If the claim was genuinely never examined by the AO, even if it was visible on the face of the return, the change-of-opinion defence is weaker, and the case may instead turn on whether the AO otherwise had valid 'reason to believe' or new information. Each case depends on its specific facts.
Received a Section 148A(b) show-cause notice or a Section 148 reassessment notice? We help clients map the AO's stated reasons against the original assessment record and draft a fact-specific reply — often the most cost-effective stage at which a reassessment dispute can be resolved.
Income Tax Notice HandlingIncome Tax FilingTalk to usThis article is general information for educational purposes, not an opinion on any specific case or notice; verify the current legal position on your facts and consult a qualified professional before acting.